I also agree that the small boats are a threat. I think we have seen from the Cole attack just what a small boat can do. With that said it seems that they are doing this quite often, and this event was blown out for the media, so the admin could take full advantage of it.
Not to mention a small boat could be rigged with a torpedo system that could be used much like PT boats were used in WW2. So they are a threat, but I think this incident was taken advantage of.
I do find it ironic that while Bush was in the middle east, visiting a terrorist nation that we call our buddies (Saudi Arabia). It's quite nice to see that he quietly approved the arms deal that will have the US supplying Saudi with a bunch of US made weapons.
One might go so far to say, as long as there is a "perceived" threat from some rogue nation like Iran, it's likely very good for business in the US arms market. Kinda hard to sell massive amounts of weapons in peace time with no threats.